Frequently Asked Questions

Title insurance costs so much. Do we have to obtain it?

Yes, title insurance is probably the best money you spend in the whole process, because it not only protects the lender but also safeguards the church from individuals who may attempt to place encumbrances on its property.

How soon can we close?

The money is available upon approval by the committee, so it depends on how quickly the title agency can complete the necessary paperwork.

What kind of extra documentation is required for a construction loan?

Necessary information includes a completed Schedule of Values form (firm cost estimate with specific line items for cost overruns and contingencies), architectural drawings, a floor plan with elevations, and other documentation as requested.

How are construction loans handled?

With a construction loan, the total loan amount is approved at closing and all the documentation is prepared and signed at closing. The church can then borrow as much as is needed during the construction phase by requesting draws from our office. At the end of each month, the church is billed only for the interest on the amount that has been drawn to date.

Can we obtain a loan for longer than 20 years?

Yes, if the circumstances warrant it. Terms can be as long as 25 years, but longer terms are discouraged because of the increased interest cost to the church over the life of the loan.

Can we obtain a loan with a payment schedule shorter than 20 years?

Yes. Normally the loan documentation will still be prepared with a 20-year payment schedule, but you will be given a payment schedule to fit the shorter number of years that are requested. This way, payments can be easily lowered by stretching out to a longer term if necessary.

Do we have to use electronic fund transfer (EFT or ACH)?

No, but it is strongly encouraged. ACH assures that your payment is always received in a timely manner. It also saves time, paperwork, and postage, and prevents mail delays or loss.

What determines your interest rates?

We base our interest rates on general market conditions. However, we do not allow our rates to fluctuate as frequently as the market. Our cost of funds is relatively stable because of our large and committed investor base, but even so, we must follow the general market conditions to remain competitive and continue to offer quality services.

Do you offer a fixed rate loan?

In the world of commercial lending, a long-term, fixed-rate mortgage product does not exist. Lenders often used the term “fixed-rate” to lure in potential borrowers when describing their short-term mortgage products. But in reality, even though the rate is fixed, it is only for a short term. Then the loan is due in full, in what is called a balloon payment. We offer long-term financing, which provides stability and flexibility that churches need. Our mortgage terms are up to 20 years, with rate adjustment periods of 1, 3, 5 or 7 years. In addition to that, we provide caps on how high your rate can rise at each adjustment and throughout the life of your loan – a guarantee you will not find with short-term mortgage products.

What are your current interest rates?

Foundation Capital Resources is committed to offering competitive loan rates and flexible terms. Interest rates vary based upon loan terms and underwriting results. Please call us for a current rate quote.

How long does it take to obtain a loan?

From the time a completed application and all supporting documentation are received, a loan can generally be approved within 10 to 20 business days, and funded within 30 to 45 days. This timeframe can vary based upon committee schedules and how quickly the escrow company completes its work. The key is to provide all requested documentation with your loan application, and stay in touch with the escrow company to make sure that its work is progressing on schedule.